Why U.S. Airline Service is So Bad

Pico
Iyer wants to know why U.S. airlines are so crap – why "a place
in Northwest’s (NWA) business class has afforded me less comfort than a seat
in the economy class of the national airlines of Bolivia, Cuba and even North
Korea". John
Gapper thinks it has something to do with "the refusal of airlines
to lie down and die" – certainly I don't think the big U.S. government
airline bailout in the wake of 9/11 did any favors to the travelling public
in the long term. But I think that the answer to Iyer's question is actually
hidden in his own post, when he tells us that United's (UAUA) frequent-flier program
"is more generous than it has to be".

Note that the centerpiece of Iyer's complaint is an abortive trip from California
to Japan, one where Iyer turns out to be quite happy being rebooked on Japan's
ANA rather than having to fly on United with his original booking. The question
naturally arises: if United is so crap, why was he booked on them in the first
place? And the answer presents itself: the frequent-flyer program, which, like
most U.S. airlines' frequent-flier programs, has developed a life of its own.

America, it seems, has been successfully captured by the U.S. airlines, to the
point at which most U.S. residents simply don't fly on any other planes. If you're
a Brit, and you're flying abroad, you'll generally choose the cheapest and most
convenient flight, no matter what class you're travelling in and no matter whether
you're flying for business or pleasure. If you're an American flying abroad,
by contrast, you'll almost certainly end up flying an American airline.

When I used to fly from the U.S. to Latin America every so often, I'd generally
fly the local airlines to get down there: Lan, Aerolineas, Varig. None of them
were spectacularly good, I must say. But one thing which jumped out at me was
the fact that there were almost no Americans on those flights – the Americans
always ended up flying on American or Continental (NYSE:CAL). Maybe part of that was fear
of the unknown, but I suspect a much bigger part was those frequent-flyer accounts.
Americans have been conditioned to expect to either earn or spend frequent-flyer
miles on every flight they take – something which mitigates strongly against
taking any foreign airline. Even sophisticated cosmopolitan New Yorkers, well
aware that Virgin and BA (OTC:BAIRY) are extremely competitive with American and Continental
to Heathrow, still nearly always end up taking a U.S. carrier.

One can understand how the U.S. ended up in this position. If you're a country
like the U.K. or Germany, where most people travel to many different countries
quite regularly and have a wide choice of airlines, any one airline has a relatively
small chance of locking in frequent fliers. If you're an airline in a small
country where the citizens don't travel a lot, then those citizens
who do travel are largely captive, and your best bet is to compete
on quality against the airlines of the countries you're flying to.

The U.S., by contrast, is unique in that most U.S. airline passengers spend most
of their time on domestic flights, racking up domestic miles. When they do occasionally
fly abroad, they simply stick with the plan they're in. Is there another country
where most flights are domestic, and where the big domestic airlines are also
the big international airlines? I don't think so, but that seems like it could
be a recipe for reliance on frequent-flyer plans rather than high-quality service.

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